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Do I need to get a prenuptial or postnuptial agreement?

| Jun 15, 2021 | Divorce |

Some couples dive into marriage with little thought about finances. Then they may get stung after a divorce. Suddenly, one of them discovers that a significant share of the assets that he or she thought were his or hers wind up awarded to the former spouse.

This is a time when a prenuptial or postnuptial agreement would have come into play and benefited each person. These legal agreements define how couples divide all assets if they divorce or one of them dies. A prenuptial agreement is created before the marriage, while a postnuptial agreement is created after the marriage. So, who should get them?

Division of assets, saves on heartache

Many couples are uncomfortable talking about finances before a marriage and may even consider a prenup as a potential death knell to a marriage. Not so. A prenup represents a common-sense approach toward marriage. A prenup may prevent an unpleasant and expensive court dispute. Since all financial matters are spelled out in the agreement, each person understands who receives what assets. There is no room here to argue.

You should consider getting a prenup agreement (or postnup) if:

  • Either you or your future spouse are wealthy and have significant assets.
  • You or your spouse expect a significant inheritance in the coming years or a large distribution from a family trust.
  • The marriage represents your second, third, fourth or even fifth one.

Death also gets addressed in prenups, declaring how much in assets your spouse receives. This is a critical component within a prenup, especially if you have a sizable estate along with children from a previous marriage to whom you wish to provide a portion of the estate.

Postnups clarify issues of potential conflict

Postnups are similar to prenups. The main difference between the two is that a postnup is created after the wedding. This is an effective document declaring a couple’s intentions for their earnings and assets while married as well if they divorce.

Postnups are usually created early into marriage or even several years after. For the former, with all the wedding planning, sometimes couples run out of time to create a prenup, so they pursue the postnup route instead. For the latter, couples with a few years of marriage under their belts become more aware of the issues that may threaten their union and hope to find clarity on issues of conflict.

Postnups can prove costly as each person usually hires their own attorneys. However, having one in place may save a lot of disputes and money regarding the division of assets.